Fuel Cells: Briefing papers

for state policymakers

August 2011
A b o u t T h e s e B r i e f i n g Pap e r s
In 2010–2011, Clean Energy States Alliance produced a series of briefing
Contents
papers for state policymakers on various topics related to stationary fuel
cells and hydrogen. This booklet collects those briefing papers together 1 Fuel Cell Technology:
in one volume: An Overview
· Fuel Cell Technology: An Overview 6 Advancing Fuel Cells
· Advancing Fuel Cells through State Policies through State Policies
· Hydrogen Production and Storage
· Fuel Cells for Supermarkets 11 Hydrogen Production
· Fuel Cells and Critical Power Applications and Storage

These materials were produced as part of a larger education and outreach 14 Fuel Cells for
initiative by Clean Energy States Alliance (CESA) to inform and engage state Supermarkets
policymakers about the benefits of fuel cells and model state policies to 18 Fuel Cells and Critical
support them. Power Applications
The briefing papers are available individually with larger graphics on the CESA
website. For further information on CESA’s hydrogen and fuel cell activities,
and to download the individual reports, please visit www.cleanenergystates.org/
projects/hydrogen-and-fuel-cells.

A C K NO W L E D GE M ENTS
Many people assisted with these briefing papers by providing information
or review. We want to thank Lewis Milford and Jessica Morey (Clean Energy D IS C L A I M ER
Group); Maria Blais and Anne Margolis (Clean Energy States Alliance); Carole Clean Energy States Alliance
does not assume any legal liability
Read and Gregory Kleen (US Department of Energy); Dustin Lilya and Pete
or responsibility for the accuracy,
Pearson (Albertsons, SuperValu); Rizaldo Aldas (California Energy Commission); completeness, or usefulness of any
Joel Rinebold (Connecticut Center for Advanced Technology); Selya Price, information, apparatus, product or
John Murphy, and Rick M. Ross (Connecticut Clean Energy Investment and process that is referred to in this
report. References in this report to
Finance Authority); Donna Ferenz (FuelCell Energy); Kerry-Ann Adamson any specific commercial prod­uct,
(Fuel Cell Today); Kathy Haq (National Fuel Cell Research Center); L. Scott process, or service by trade name,
Larsen, Paula Rosenberg, and Dana Levy (NYSERDA); Frank Blake and Benny trademark, manufacturer, or other-
wise, does not constitute or imply
Smith (Price Chopper); Timothy Lipman (University of California at Berkeley); endorsement, recommendation
Michael Glynn and Homer Purcell (UTC Power); David J. Allar (Wegmans), or favoring neither by the United
and Kathy Loftus and Lindsay Lehfeld (Whole Foods Market). We also want States Government or any agency
thereof, nor of the individual
to thank DG Communications for designing and producing the individual
members of Clean Energy States
briefing papers and this booklet. Alliance. The views and opinions
expressed in this series of reports
This four-part series was begun by Charlie Kubert (1959-2010), who wrote do not necessarily state or re­flect
three of the reports and laid the ground work for a fourth. Charlie was a those of the United States Govern-
valuable member of the CESA team, and we would like to honor his ment or any agency thereof, nor
the individual mem­bers of the
contributions to this project. Clean Energy States Alliance.

FIN A N C I A L SU P P ORT
Work on these briefing papers
Funding for this report was generously provided by the US Department was conducted under US DOE
of Energy’s Hydrogen Education State Partnership Project with supplemental Grant DE-FC3608GO18111 A000,
support from Clean Energy States Alliance. Office of Energy Efficiency and
Renewable Energy Fuel Cell
Technologies Program.
 Fuel Cells: Briefing Papers for State Policymakers • Fuel Cell Technology 1

Fuel Cell Technology

A Clean, Reliable Source of Stationary Power
Charles Kubert • May 2010 (updated August 2011)

Introduction

F
or many years, the focus of the emerging “hy-
Figure 1:
drogen economy” has been on the use of
How a Molten Carbonate Fuel Cell Works
hydrogen fuel cells for vehicles. While federal
and state government and automakers still

R
continue to invest in and promote policies to

AI
create the “hydrogen highway,” private businesses and CO2 Cathode e-
government agencies are increasingly deploying fuel
cells for stationary power applications. Stationary fuel

2
Electrolyte

CO
cells are a technology that is commercially available, reli- DC Power
able, suitable to a wide variety of applications, declining Anode

2
CO
in costs, and with federal and state support, becoming CO2
e-
e-

more affordable.

Technical Background
A fuel cell is a device that converts the chemical energy
of a fuel (usually hydrogen derived from natural gas or
biogas) and an oxidant (air or oxygen) into electricity. In
principle, a fuel cell operates like a battery. Unlike a battery,
however, a fuel cell does not run down or require recharg-
ing (although cell stacks may need periodic replacing).
It will produce electricity and heat as long as fuel and an
oxidant are supplied. The fuel cell itself has no moving
parts­—making it a quiet and reliable source of power (see
Figure 1). A fuel cell stack is a chemical power generator
“sandwich” that consists of three parts: an anode, a cathode,
and an electrolytic material in the middle. There are several
EL
FU
Water Heat
kinds of fuels cells, and each works slightly differently.
In general terms, at the anode, hydrogen atoms enter and
their electrons are separated so that the hydrogen ions
(protons) pass through the electrolyte, while the nega-
tively charged electrons pass through an external electrical
circuit as direct current (DC) that can power useful devices.
Whether the hydrogen ions combine with the oxygen at
the cathode or at the anode, together hydrogen and oxy-
gen form water that is drained from the cell. The chemical
reactions for a molten carbonate fuel cell are as follows:

Table 1: Comparison of Fuel Cell Operating Characteristics

Fuel Operating Electrical CHP
Cell Type Temp. (F) System Size Efficiency Efficiency* Applications Key Advantages
<250 kW 70–90%
Low temperature,
PEM 122–212 (typically 5– 25–35% (low grade Backup Power
quick startup
10 kW) heat)
50 kW–1 MW Tolerance
Phosphoric Distributed
302–392 (typically 250 kW >40% >85% to hydrogen
Acid Generation
module) impurities
50 kW–1 MW High efficiency,
Molten Distributed
1112–1292 (typically 250 kW 45–47% >80% fuel and electro-
Carbonate Generation
module) lyte flexibility
Utility-scale; High efficiency,
Solid
1202–1832 <1 kW-3 MW 35–43% <90% large distribut- use of solid
Oxide
ed generation electrolyte
*Assumes use of by-product heat Source: U.S. Department of Energy Hydrogen Program
 Anode Reaction: CO32- + H2 => H20 + CO2 + 2e-
Cathode Reaction: CO2 + 1/2O2 + 2e- => 2H2O
Overall Cell Reaction: H2 + 1/2O2 + CO2 = H2O + CO2
The major types of fuel cells—proton exchange membrane
(PEM), phosphoric acid, and solid oxide—utilize different
materials and processes and have different operating
characteristics:
• PEM fuel cells are well-suited for back-up power
applications at sites such as communication towers
and equipment since they ramp up quickly and
operate at low temperatures.
• Phosphoric acid fuel cells were a first-generation
technology commercialized in the early 1980s. Their
advantages for use as baseload power include high
operating efficiency, particularly when waste heat is
re-used, simple construction, low electrolyte volatility,
and long-term operating stability.
• Molten carbonate fuel cells operate at higher temper-
atures and are also designed to be used as a baseload,
24/7 power source. Molten carbonate fuel cells con-
vert gas into hydrogen within the fuel cell itself, avoid-
ing the need for on-site storage of hydrogen or an
external reformer.
© FuelCell Energy
California State University, Northridge
CSUN installed a 1 MW stationary fuel cell power plant sys-
tem from FuelCell Energy®. The system reforms hydrogen
from natural gas to power the fuel cell and has successfully
reduced the university’s energy costs, improved power
security through reduced reliance on the grid, created a
state-of-the-art educational tool, and reduced their carbon
footprint. Approximately 18% of the university’s baseload
power requirement is met by the fuel cells. The university
further benefits from the fuel cells by utilizing by-product
heat to provide 22 billion BTUs of thermal energy per year
used to heat water for the campus, and by channeling re-
sidual CO2 into an adjacent greenhouse where research on
carbon dioxide plant enrichment is taking place.
• Solid oxide fuel cells are emerging as the latest fuel
cell technology. Advantages of solid oxide fuel cells
include an ability to reform gas within the fuel cell,
the use of low-cost solid ceramic materials instead of
a liquid electrolyte containing precious metals or cor-
rosive material, and very high operating efficiency.
In addition to electric power, some stationary fuel cells
also produce, as a by-product, heat that can be used for
water, space, or process heating. The by-product heat can
also be used to provide cooling through absorption or
adsorption cooling systems technology to drive a refrig-
eration cycle. By capturing the waste heat from the fuel
cell system, the overall thermal efficiency of the system
can be very high under the right conditions. The already
high 40–50% electrical efficiency that fuel cell systems
offer can reach 90% in thermal efficiency, with the utili-
zation of by-product heat.
Fuel cells can be scaled to provide power to anything
from a portable electronic device such as a cell phone or
a computer to large commercial, industrial and institutional
facilities and even utility-scale projects. Because they are
modular, multiple units can operate parallel to one another.
Applications
Fuel cells can be deployed in any setting where a reliable
source of baseload, on-site power is desired and, ideally,
where by-product heat can be effectively utilized. They
are also well-suited as alternatives to batteries or diesel
generators for strictly back-up power applications, particu-
larly in remote areas (such as cellular phone towers), and
at critical facilities in urban areas with air quality issues.
Current Fuel Cell Market
There are currently several hundred large fuel cell instal-
lations in the United States. In 2010, the U.S. market grew
by more than 50%. Globally, 30 to 50 megawatts (MW) of
fuel cell capacity are being installed annually with a project-
ed 213 MW of new installed capacity in 2013. Projects are
getting larger, with the average stationary fuel cell instal-
lation growing to about 1 MW, up from 250 kW in 2005.
Costs
Costs for stationary fuel cell installations have dropped
from about $600,000 per kW in the 1970s (when fuel
cells were developed for NASA) to about $4,500 per kW
today for the most widely deployed technologies. This is
higher than the capital costs for fossil-fuel based distrib-
uted generation such as diesel generators and gas tur-
bines. But it is lower than the capital costs of other distrib-
uted clean energy technologies such as solar photovoltaics.
The U.S. Department of Energy’s goal is to reduce this cost
to about $400 per installed kW by 2020 for solid oxide
 Fuel Cells: Briefing Papers for State Policymakers • Fuel Cell Technology 3

Figure 2: Annual Number of Large Fuel Cell Units and MW Installed

130
120 80
Units MW
110
70
100
90 60

Installed MW Per Annum

Number of Units

80
50
70
60 40
50
30
40
30 20
20
10
10
0 0
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Source: Fuel Cell Today, 2008 Large Stationary Survey; Pike Research, Research Report Stationary Fuel Cells (2011); DOE, 2010 Fuel Cell Technologies
Market Report

fuel cell technology. It has formed the Solid State Energy
Conversion Alliance (SECA), a government-industry part-
nership to achieve that goal. Like renewable energy tech-
nologies, fuel cells are eligible for the 30% federal Invest-
ment Tax Credit and for direct financial subsidies, in
some states, lowering their capital costs considerably.
Because fuel cells can operate as a continuous, baseload
source of power (unlike solar or wind which are intermit-
tent), these capital costs can be spread out over far more
kilowatt-hours (kWh) produced, especially when the by-
product heat is captured and re-used. UTC Power projects
that its PureCell® 400 kW unit will be able to produce power
at 16¢/kWh (with 50% heat utilization), and at 14¢/kWh
(with 100% heat utilization), before any federal or state
subsidies. The capital costs of fuel cells can also be transferred
through third-party ownership, in which a manufacturer
or financial intermediary owns the system, realizes the tax
benefits and sells energy to the host facility under a fixed
price contract.
Table 2: Comparative Capital Costs for Distributed
Generation Technologies
Technology Cost ($/kW)
Diesel Generator $800–$1,500
Reciprocating Gas Engine $1,800–$2,000
Stationary Fuel Cells (1–200 kW) $2,500–$4,500
Wind Turbine (50 kW–100 kW) $1,500–$5,000
Solar Photovoltaics (1–100 kW) $6,000–$8,000
Benefits of Fuel Cells
Stationary fuel cells have considerable benefits both
to the facility where they are installed and to the public
at large. These benefits will multiply as the costs of fuel
cells continue to decline relative to grid power and the
number of installations increases.
User Benefits
Reliability
Fuel cells are well suited for primary power applications,
providing both an extremely reliable and high-quality
source of on-site power. This reliability makes them ideal
for public safety facilities such as emergency dispatch
centers, police and fire stations and hospitals. For private
facilities such as computer server farms, data centers and
laboratories where even momentary losses of power or
voltage changes can disrupt computers and sensitive
equipment, fuel cells deliver the sustained power quality
needed, with grid power acting as a backup. Even non-
critical facilities such as office buildings, retail stores and
hotels can benefit from a grid-independent source of
power that can also displace other fuels for heating,
cooling and refrigeration.
Siting
While fuel cells have some local siting challenges, in
general they are easy to site relative to other distributed
generation technologies because they can operate
emission-free, are quiet and compact. In some states
such as California, they are completely exempt from

United States Postal Service,
San Francisco CA
T
he 680,000 square foot facility is a major postal
service hub, processing 7.5 million pieces of mail
per day. With the assistance of a third-party
energy service provider, the facility installed a 250 kW
fuel cell to provide a portion of both its power and
space heating needs. The fuel cell complements a 285
kW, roof-mounted solar photovoltaic system that pro-
vides maximum output during periods of peak de-
mand. The facility received financial support from
both the California Self-Generation Incentive Program
(SGIP) which provides incentives of $2,500 per kW for
natural-gas fuel cells, as well as the U.S. Department
of Defense Climate Change Fuel Cell Program.
permitting requirements. Fuel cell technologies that
directly utilize natural gas (or biogas) avoid any local
concerns over on-site hydrogen storage.
Remote Operation
Fuel cells can be operated and monitored remotely. This is
important for fuel cells installed as backup power in remote
locations such as telecommunications towers.
Baseload Clean Energy
Many businesses and public facilities are installing solar
photovoltaics as a way of providing on-site clean energy.
Fuel cells’ high efficiency and ability to produce constant
power makes them a good complement to solar.
Energy Cost Hedge
The installation of fuel cells can insulate businesses from
unpredictable and rising electricity costs. While fuel cells
still require hydrogen or natural gas as an input, these
costs might rise less quickly than electricity, particularly in
the event of state, regional, or federal carbon legislation.
Table 3: Comparative Emissions Profiles of Fuel Cells vs. Distributed and Central Generation
Generation Technology NOx (lbs/MWh)
Fuel Cells 0.01
Diesel Generators 5.9-17.1
Combined Cycle Natural Gas 0.11
Pulverized Coal 0.69
*Assumes internal conversion of natural gas to hydrogen within the fuel cell.
CO2-equivalent emissions would be reduced or eliminated if biogas or a renewable source of hydrogen were used.
Public Benefits
Environmental
Stationary fuel cells result in dramatically reduced on-
site air pollution relative to back-up diesel generators. They
can also result in reduced emissions relative to grid power
depending on the source of generation that is displaced.
This is due to the use of natural gas or biogas as the source
of hydrogen, the high conversion efficiency of fuel cells,
and the absence of particulate emissions. Fuel cells are
driven by electrochemistry, not combustion. As a result,
fuel cells emit only trace amounts of NOx. Because fuel
cells are intolerant of sulfur, the fuels used have to be de-
sulfurized, and thus fuel cells emit no SOx. If the direct
fuel input is hydrogen, then only water vapor is generated
in the exhaust. Because of the high electrical efficiency
of fuel cells, the amount of CO2 emitted per kWh of elec-
tricity generated is lower than from conventional fossil-
fuel generation. Avoided emissions are further increased
when the facility is configured to utilize the waste heat
from the fuel cell. Table 3 compares the emissions profile
of a fuel cell versus other forms of distributed and central
power generation.
Avoided Generation and Transmission Costs
Like other distributed generation technologies, fuel cells
displace utility purchases of wholesale electricity on the
margin and during peak demand periods. The cumula-
tive effect of fuel cells with other distributed generation
resources can also defer the need to build both additional
generation and distribution system upgrades.
Public Safety and Security
When power blackouts occur, the need to maintain
critical public facilities and services ranging from police
and fire dispatch to hospitals to water pumping and
wastewater treatment is essential. Fuel cells provide
a reliable way to ensure that these facilities stay up
and running.
Particulate Matter
SO2 (lbs/MWh) (lbs/MWh) CO2 (Tons/MWh)
0.001 None 0.49*
0.3-0.5 0.74-3.0 0.75-0.9
0.022 0.067 0.50
1.41 0.28 0.97
Source: National Fuel Cell Research Center
 Fuel Cells: Briefing Papers for State Policymakers • Fuel Cell Technology 5

Sierra Nevada Brewing Co, Sheraton New York Hotel

A
Chico, CA
s part of a major renovation, the 1,750-room
The Sierra Brewing Company
Sheraton New York Hotel installed a 250 kW fuel
wanted to find a reliable and
cell. This was the first hotel in New York to do so.
affordable way to power its
state-of-the-art brewing facility The unit provides 10% of the electrical load of the hotel
and, due to the hotel’s large and constant hot water
FuelCell Energy

that was also environmentally-

friendly. Its solution was a com- needs, effectively utilizes the system’s waste heat to
bined heat and power, 1 MW supplement natural gas in its boilers. The system received
fuel cell power plant that pro- financial support from NYSERDA, New York State’s
vides nearly all of the brewery’s energy research and development administration,
baseload power needs and the by-product heat and steam which also manages its clean energy fund.
are used in the brewing process as well as other heating needs.
This system not only lowers the overall energy cost at the plant,
but also eliminates air pollutant emissions. When the fuel
cells generate more power than is needed, Sierra Nevada
sends the excess electricity into the grid and receives net-
metering credit. Coming Soon:
Fuel Cells for Your Home

W
hile fuel cells in the United States are today
targeted towards commercial use, in Europe
Dublin San Ramon Services District Regional and Japan, they are beginning to be manu-
Waste Water Treatment Facility, Pleasanton, CA factured and sold for the residential market. In Japan,
Two 300 kW fuel cells residential fuel cells, about the size of a refrigerator,
were installed at the are being sold for $30,000 ($15,000 after government
DSRSD regional waste- subsidy). More than 10,000 units were sold there in
water treatment plant. 2009 and 2010. Analysts expect the cost to drop to
This fuel cell system about $5,000 within five years and one in four homes
was designed to use in Japan to have them by 2050. Beyond reducing
the biogas generated dependency on the electric grid, converting natural
by the wastewater
gas into electricity (with the waste heat being used for
treatment process as
FuelCell Energy space and hot water heating) would save homeowners
their renewable fuel
a considerable amount in energy costs and also re-
source. The fuel cells also generate heat that is used to pre-
heat waste sludge, optimizing the anaerobic digestion pro- duce the net carbon emissions of a home. Although
cess. The fuel cell helps reduce the demand on the local power the Japanese fuel cells are not likely a good match for
grid by providing as much as 50% of the facility’s required the energy load of most American homes, ClearEdge
power. Because the facility is utilizing biogas, it was eligible Power, an Oregon-based company, has introduced
for a larger $4,500/kW incentive from California’s SGIP. a unit designed for the American market.

Conclusions Policies such as including fuel cells as eligible resources

Fuel cells are coming into widespread commercial use for
stationary applications, and their combination of reliability,
efficiency, and low environmental impact make them an
outstanding distributed generation technology for a range
of applications. As the technology improves and costs de-
cline, more businesses and public institutions should turn
to fuel cells as a source of both primary and backup power.
However, as with other clean energy technologies,
states play an important role in accelerating their adop-
tion through both public policy and financial support.
in state renewable portfolio standards, encouraging or
requiring the use of fuel cells in critical public facilities,
and adopting uniform siting guidelines are important
steps. In addition, providing financial incentives through
state clean energy funds can help businesses overcome
the first cost hurdles of installing fuel cells. These policy
recommendations are reviewed in greater depth in an
accompanying briefing paper, “Advancing Stationary
Fuel Cells through State Policies.”
 6 Clean E n e r g y stat e s a l l i a nce
Advancing Stationary Fuel Cells
through State Policies
Charles Kubert • May 2010 (updated August 2011)
Introduction
O
ver the past decade, states and munici-
palities have increasingly shaped public
and regulatory policy to support renew-
able energy generation, from residential,
roof-mounted, solar photovoltaic systems
to large, commercial wind farms. They have done so for
a number of reasons: in-state economic development,
displacing emissions from conventional energy sources,
diversifying the state’s energy portfolio, and providing
a long-term hedge against uncertain and volatile
energy prices.
Stationary fuel cells share many of the characteristics
of renewable energy generation. Fuel cells provide clean,
quiet, efficient, and reliable distributed generation for a
variety of applications: from critical facilities such as airports,
emergency dispatch centers, hospitals, and telecommu-
nications towers to office buildings, retail stores, and
industrial facilities. Unlike many renewable energy tech-
nologies, fuel cells are not an intermittent source of
power and can provide consistent, reliable power.
Yet, despite these advantages, most states have yet
to give fuel cells the level of support they have provided
to other clean energy technologies. This briefing paper
identifies those policies that states have or can adopt to
support fuel cells. These policies are broken down into
three areas: 1) those that support the deployment of fuel
cells, 2) those that remove state and local barriers to fuel
cell installations, and 3) those that promote the develop-
ment of an in-state fuel cell manufacturing sector.
Policies to Support Fuel Cell Installations
Hydrogen “Road Maps”
Many state energy or economic development offices
have developed strategic plans to grow hydrogen and
fuel cell industries and markets within their states. While
a number of these have focused on hydrogen-powered
fuel cells for transportation applications, other state
plans are centered on the development of a fuel cell
manufacturing industry and the deployment of fuel cells
in stationary applications. These plans help to provide
policymakers with a vision of how fuel cells can play a
role in their state’s economy and energy portfolio. For an
example of a state hydrogen and fuel cell roadmap, see
the Connecticut Center for Advanced Technology
website at http://energy.ccat.us/energy/fuelplan.php.
Renewable Portfolio Standards
Twenty-nine states now have renewable portfolio standards
(RPS), which have been the most important state-level
policy driver for renewable energy development. These
RPS policies primarily support large-scale projects such
as wind energy. Few RPS laws include fuel cells as an eligi-
ble resource unless the hydrogen used in them is pro-
duced from a renewable resource such as biogas (almost
all hydrogen produced in the United States currently is
reformed from natural gas). By including fuel cells that uti-
lize natural gas as an eligible resource, these technolo-
gies would qualify for the state RPS. If included in a distrib-
uted generation technology set-aside, as states have done
with solar photovoltaics, fuel cells could receive some
market-based financial support as well. Currently, only
seven states (CT, DE, ME, MN, NY, OH, and PA) include all
fuel cells, regardless of the fuel source, as RPS-eligible.
An alternative approach would be to require utilities to
install a certain amount of fuel cell generation capacity
(either utility- or customer-sited) by a certain date and
to allow cost recovery of these installations.
Tax Incentives
Many states provide sales tax and property tax exemp-
tions for renewable energy technologies. These exemp-
tions should be extended to fuel cells to assist this clean
energy technology to gain marketshare. This would com-
plement the 30% federal investment tax credit (extend-
ed through 2016), for which fuel cells are eligible.
State Purchasing Leadership
States can take the lead in acquiring fuel cells to replace
diesel generators for back-up power in both new and
existing facilities. Fuel cells could also be deployed as
a primary source of power in new, high-profile public
buildings such as at universities, administrative buildings,
or airports. The long ownership cycle of these buildings,
together with low financing costs, allows states to spread
out the cost of these installations over many years.
 Fuel Cells: Briefing Papers for State Policymakers • State Policies 7
Critical Facilities
States can encourage the use of fuel cells as primary and/or
back-up power in new telecommunications towers, hos-
pitals, and emergency service facilities. They could do so
directly by specifying that fuel cells be used, or indirectly by
increasing the performance standards for back-up power
(e.g., lower emissions, greater operating efficiency or more
reliable performance), which would lead to the selection
of fuel cells as the ideal generation source. While it is diffi-
cult to calculate “payback” on emergency and back-up
power installations, the long investment time horizons
and the public purpose of these facilities should allow
states and municipalities to support the higher up-front
costs of fuel cells for backup power. For more informa-
tion on the application of fuel cells for critical facilities,
please see the companion briefing on Stationary Fuel
Cells and Critical Power Applications.
State Clean Energy Funds
Eighteen states have ratepayer-supported clean energy
funds that collectively have provided billions of dollars
in support to renewable energy projects over the past
decade. With the exception of California, Connecticut,
New York and Ohio, state funds are not yet targeting fuel
cells as an area of support. Direct grant assistance would
encourage both private and public sector facilities to ac-
quire fuel cells. These installations would, in turn, raise
visibility of the technology and encourage further instal-
lations. States could consider establishing performance-
based incentives rather than lump-sum grants at time of
project completion. In addition, states will want to consid-
er whether to only support projects using fuel cells for base-
load power, or to also support back-up power applications.
These state clean energy funds have been the most
active in supporting fuel cell installations at both private
and public facilities.
NYSERDA
The New York State Energy Research and
Development Authority (NYSERDA) is
the administrator of the State’s Renew-
able Portfolio Standard Customer Sited
Tier Fuel Cell Program. The program has
a total of $21.6 million in available funding ($3.6 million
per year) through 2015. The program is divided into two
categories; the Large Fuel Cell Program for systems larger
than 25kW and the Small Fuel Cell Program for smaller
systems. Through this program and similar predecessor
programs, NYSERDA has approved funding to install 33
large stationary fuel cells and 24 small stationary fuel cells.
Under the Large Fuel Cell Program, NYSERDA offers
two types of financial incentives, with a maximum of
$1 million per project site. Projects can apply for capacity
incentives based on the manufacturers’ nameplate rating
of the fuel cell, with an upper limit of $200,000 per project
site. Projects at sites of Essential Public Services, such as
police stations and hospitals, or where the fuel cell system
will be an integral part of a documented and verifiable
“facility of refuge”, may receive up to an additional $100,000.
Performance-based incentives are paid to facilities that
operate with an annual capacity factor of at least 50%.
They are paid based on performance during the first three
operating years subsequent to commissioning and are
capped at $300,000 per year.
Under the Small Fuel Cell Program, performance
incentives are available of up to $50,000 per project site.
They are paid to those facilities operating with an annual
capacity factor of at least 50%. Like the performance in-
centives for large systems, they are based on the first three
years of operation but are capped at $20,000 per year.
CLEAN ENERGY
FINANCE AND INVESTMENT AUTHORITY
Clean Energy Finance and Investment Authority
The Clean Energy Finance and Investment Authority (CEFIA),
formerly the Connecticut Clean Energy Fund, has been a
national leader in the support of fuel cell installations. CEFIA’s
On-site Renewable Distributed Generation Program has
provided grants totaling approximately $23 million to 18
fuel cell projects representing installed capacity of 7.5 MW.
There are an additional 3.4 MW of pending projects sup-
ported by $8 million in grants from the Federal Government
through the American Recovery and Reinvestment Act.
Connecticut’s Project 150 is an initiative to increase
the amount of in-state renewable energy generation
by requiring utilities to enter into long-term contracts
for 150 MW of Class I renewable energy generation
(fuel cells are Class I in Connecticut). Seven fuel cell
projects were awarded contracts under Project 150.
Although CEFIA is not directly funding these projects,
it played an important role in evaluating project
proposals.
CEFIA’s New Technology Programs support develop-
ment and commercialization of emerging clean energy
technologies, including fuel cell and hydrogen genera-
tion technologies. The Operational Demonstration
Program has provided funds for a number of projects
to demonstrate commercial viability of new methods
of hydrogen and electricity production using fuel cell
technology. These projects were supported by nearly
$1.1 million in seed funding which has leveraged approxi-
mately $36 million in federal support. The program will
continue to provide $2 million annually to fund a mini-
 8 Clean E n e r g y stat e s a l l i a nce
Pepperidge Farm,
Bloomfield, Connecticut
Pepperidge Farm, the cookie
and cracker manufacturer,
installed a 250kW fuel cell
in its Bloomfield, CT bakery FuelCell Energy
in 2006. This was followed by the installation of a much larger
1.2 MW fuel cell in 2008. Together, the two fuel cells will pro-
vide 70% of the electricity needed by the plant while utilizing
waste heat in the plant’s boilers. The fuel cells have an electrical
conversion efficiency of 47% and an overall system efficiency
of 70% through reusing the waste heat. Both installations were
supported by significant grants from the Connecticut Clean
Energy Fund, consistent with that state’s commitment to
supporting its fuel cell manufacturing industry.
mum of four projects. Additionally, CEFIA has created
a new early-stage technology funding program, the
Alpha Program, providing more than $800,000 annually
to support a minimum of four projects.
CEFIA has also begun a Fuel Cell Performance Moni-
toring Program at five sites with the economic and oper-
ating data to be used to establish the value proposition
for fuel cells.
California
The California Public Utilities Commission’s ratepayer-
funded Self-Generation Incentive Program provides
support for commercial-scale installations of a variety
of distributed generation technologies. The program has
funded 67 fuel cell projects totaling 30 MW in capacity.
The program provides support levels of $2.50/watt for
fuel cells using non-renewable resources and $4.50/watt
for those using gas from renewable sources such as bio-
gas from wastewater treatment facilities. http://www.
cpuc.ca.gov/PUC/energy/DistGen/sgip/
These direct incentives are complemented by the
work of the California Stationary Fuel Cell Collaborative
(www.casfcc.org), which promotes the use of fuel cells for
distributed generation and other specialized applications
within California. Under the guidance of the Collaborative,
private industry and public agencies work together to:
• Advance programs and activities that accelerate the
deployment of fuel cells
• Advance public policy supportive of stationary fuel
cells, including addressing siting barriers, encourag-
ing state procurement of fuel cells for use in public
building and maintaining financial incentives for fuel
cell installations
• Initiate public demonstrations of fuel cells
• Conduct key studies to further existing knowledge
about fuel cell capabilities ,performance and the im-
pact of fuel cells for distributed generation, backup
power and specialty vehicles and
• Raise public awareness about and acceptance of
stationary fuel cell technologies
Removing Installation Barriers
In addition to providing appropriate incentives, state
and local governments need to address and remove
barriers that may restrict the installation of fuel cells.
Interconnection and standby charges
Interconnection is the process by which any distributed
generation (both renewable and non-renewable) is con-
nected to the local electric distribution grid. For many years,
utilities put up roadblocks that made interconnection
difficult. These included costly impact studies, insurance
requirements, and delays. Most state regulatory commis-
sions have addressed the interconnection problems that
have held back all forms of distributed generation. How-
ever, the effectiveness of interconnection rules varies by
state, and there is room for improvement in many states.
For a review of state interconnection standards, see the
annual “Connecting to the Grid” report, http://www.irecusa.
org/wp-content/uploads/2009/10/Connecting_to_the_Grid_
Guide_6th_edition-1.pdf. For model interconnection rules,
see http://irecusa.org/wp-content/uploads/ 2010/01/IREC-
Interconnection-Procedures-2010final.pdf.
Hydrogen Transportation and Storage
State and local fire marshals as well as the public are
concerned about the movement and storage of hydrogen,
even though hydrogen is a commonly used industrial gas
stored at tens of thousands of industrial facilities. Both
the International Code Council (ICC) and the National
Fire Prevention Association (NFPA) have developed a set
of codes and standards pertaining to hydrogen transport,
storage, and distribution. In addition, NFPA is developing
a new comprehensive set of hydrogen standards which
was released in 2010, and the International Mechanical
Code and International Fuel Gas Code also address
hydrogen. These codes cover storage tank specifications,
setbacks and enclosures, signage and other factors. State
policymakers should ensure that their state fire and build-
ing codes are consistent with these international and
national standards and formalize this consistency through
legislation if necessary. Since many of the larger fuel cell
technologies produce hydrogen on-site within the fuel
cell itself, this code adoption is primarily relevant to
on-site storage of hydrogen for PEM fuel cells used for
back-up power and materials handling equipment. See:
http://www.nfpa.org; see also CESA’s companion briefing
guide on Hydrogen Production and Storage.
 Fuel Cells: Briefing Papers for State Policymakers • State Policies 9
Project Zoning, Siting and Permitting
Siting approval and permitting for fuel cell projects is
the domain of local governments. Like any energy project,
local discretion can move a project forward or stall it. State
policymakers should review local zoning and permitting
codes regarding hydrogen storage and fuel cells and, to
the extent possible, attempt to develop a consistent set
of standards used by local governments. For more infor-
mation on permitting, see http://www.hydrogen.energy.
gov/permitting/permitting_process.cfm.
Fuel Cell Industry Support
Several states have invested considerable resources
in building fuel cell manufacturing clusters. Connecticut,
Ohio, South Carolina and Hawaii have all worked hard to
make their states leaders in a growing fuel cell industry.
While the industry is not yet large enough to support manu-
facturers in every state, the activities in these states pro-
vide collaborative models for stimulating industry growth.
Connecticut
The Connecticut Hydrogen-Fuel Cell Coalition (www.
chfcc.org), administered by the Connecticut Center for
Advanced Technology (CCAT), is comprised of representa-
tives from Connecticut’s fuel cell and hydrogen industry,
labor, academia, government, and other stakeholders. CCAT
and the Connecticut Hydrogen-Fuel Cell Coalition work
to enhance economic growth through the development,
manufacture, and deployment of fuel cell and hydrogen
technologies and associated fueling systems in Connecticut.
Connecticut companies now lead the world in the
development of alkaline, molten carbonate, and phos-
phoric acid fuel cells and are among the leaders in pro-
ton exchange membrane and solid oxide fuel cell devel-
opment. Connecticut companies in hydrogen generation
are leaders in both alkaline and proton exchange mem-
brane electrolysis systems and in converting natural gas
or petroleum products to hydrogen through reforming
Gills Onions of Oxnard, CA, with its
FuelCell Energy
Advanced Energy Recovery System,
coverts 100% of the onion waste at its
processing facility (about 1.5 million
pounds of onion waste per week) into
clean, virtually emissions-free, heat, electric power, and high-
value cattle feed by using an anaerobic digester to produce
methane gas from the onion waste to power two (2) 300 kW
fuel cells, which provide Gills Onions with up to 100% of
baseload electricity requirements. For installing the system,
Gills Onions is eligible to receive $2.7 million from Southern
California Gas Co. as part of the state’s Self- Generation Incen-
tive Program, which encourages self-contained generation
by businesses.
processes. Connecticut is home to UTC Power, FuelCell
Energy and Proton Energy Systems, among others.
One of the key strengths of Connecticut’s program is
that it has combined the industry development focus of
the Fuel Cell Coalition with additional support for project
deployment through the Connecticut Clean Energy In-
vestment and Finance Authority (CEFIA). CEFIA’s financial
support of commercial fuel cell installations not only helps
the industry to build an in-state market but also provides
outstanding fuel cell demonstrations which can be used
to promote the technology
and the industry throughout the country.
As a result of these efforts, employment in the fuel
cell industry has grown dramatically in Connecticut, with
an estimated 2,000 working in the industry supply chain,
representing over 70% of all renewable energy jobs in
the state.
Ohio
For the past decade, the State of Ohio has focused
on building a fuel cell research and manufacturing clus-
ter and industry supply chain. These efforts have been
financially supported by the Ohio Third Frontier Pro-
gram (www.ohiothirdfrontier.com), a state economic de-
velopment program funded through tax-exempt bonds
that provides financial support to move companies and
products from R&D through commercialization. The pro-
gram focuses on industry clusters where the state has
competitive strengths, including advanced materials
and fuel cells.
The Third Frontier Program has been enhanced by the
work of the Ohio Fuel Cell Coalition (www.fuelcellcorridor.
com), a group of industry, academic and government
institutions working collectively to strengthen the state’s
fuel cell industry and become a global leader in fuel cell
technology. Its primary objectives are to:
• Build upon existing industry and academic strengths
in the state to advance the integration of a coordinated,
robust fuel cell supply chain.
• Promote public awareness of fuel cells as both a source
of clean energy and a source of economic growth for
the state.
• Expand networking and information-sharing among
those engaged in the industry
• Identify and encourage federal funding that can lever-
age state resources in the development of a fuel cell
industry in the state.
South Carolina
South Carolina has developed one of the most integrated
and well-funded hydrogen fuel cell industry development
initiatives in the country (www.schydrogen.org). These
 10 Clean E n e r g y stat e s a l l i a nce
initiatives include:
• Industry Partnerships: There are many partnerships
between institutes and large corporations. For example,
Toyota Motor Corporation has invested approximately
$1 million in the Center for Hydrogen Research in Aiken.
• Hydrogen Infrastructure Development Fund: This
$15 million public fund is available to private companies
that work with USC, Clemson, S.C. State University and
the Savannah River National Laboratory. South Caro-
lina taxpayers who contribute to the Fund receive a
25% credit against their state income tax. Fund contri-
butions will be granted to promote the development
and deployment of hydrogen production, storage,
distribution, and dispensing infrastructure.
• Local Investments in Hydrogen Research: South
Carolina’s local communities have also shown strong
support for hydrogen and fuel cells. In 2005, Aiken
County fully funded the construction of the Center
for Hydrogen Research, a $10 million state-of-the-art
facility designed to facilitate cooperative research
among the Savannah River National Lab, universities,
and industry.
• USC Columbia Fuel Cell Collaborative: The University
of South Carolina, the City of Columbia, the South
Carolina Research Authority (SCRA), and EngenuitySC
joined together to form the USC Columbia Fuel Cell
Collaborative in 2005. The collaborative has three
principal goals: to position the Columbia, SC, region as
a leader in fuel cell innovation; to become world-class
innovators for the hydrogen and fuel cell economy; and
to recruit and retain fuel cell scientists, entrepreneurs,
and innovators to help make South Carolina a pre-
eminent location for the hydrogen and fuel cell economy.
Hawaii
Hawaii, as a state with high-cost energy, has always been
seeking ways to increase its share of clean, locally sourced
Fuel Cells for Combined
Heat and Power
At South Windsor High School in
CT, a UTC PC25 fuel cell generates
200 kW of electricity. Not only does
that clean energy significantly
reduce the high school’s demand
upon the power grid, but the school
further benefits by capturing the more than 900,000
BTUs of heat that the fuel cell generates hourly. That by-
product heat is used for space heating and to preheat boil-
er return water.
This project was funded with support from the Connecticut
Clean Energy Fund.
energy. Its long-running hydrogen program is an example
of this. The program has centered on three areas: research,
investment, and deployment.
• Research: In 1974, spurred by the OPEC oil embargo,
the Hawaiian legislature established the Hawaii Natural
Energy Institute (HNEI) at the University of Hawaii with
the mandate to transition the state off of oil. Since that
time, hydrogen has been supported as a key technology
in this effort. In September 1985, HNEI was awarded a
contract from the Department of Energy to establish
the Hawaii Hydrogen from Renewable Resources Pro-
gram. HNEI has also created the Hawaiian Fuel Cell Test
Facility (HFCTF), with a public/private consortium of the
Office of Naval Research, UTC Fuel Cells, and the Hawai-
ian Electric Company, the state’s largest electric utility.
• Investment: In 2006, the Hawaiian legislature appro-
priated $10 million for a hydrogen investment fund.
This fund was created to develop a world-class renew-
able hydrogen program in Hawaii and has the goal
of leveraging over $100 million in additional capital.
The fund is managed by a private venture capital firm
with assistance from HNEI, which is responsible for
developing an overall state hydrogen program devel-
opment plan, the technical evaluation of proposed
investments, hydrogen infrastructure project manage-
ment, and attracting cost-share projects to the state.
• Deployment: The first cost-sharing grant from the
state investment fund was awarded to the Hawaii
Hydrogen Power Park at Hawaii Volcanoes National
Park (HAVO). The project includes hydrogen pro-
duction from renewable electricity, compression,
storage, delivery, and dispensing to hydrogen vehi-
cles. Separately, HAVO was awarded $2 million from
the National Park Service to purchase two hydrogen
fueled shuttle buses.
Conclusions
Despite being a proven technology with significant
performance and environmental benefits, stationary
fuel cells have yet to achieve the visibility or market
acceptance that other clean energy technologies have.
Proactive state policies that are targeted directly at fuel
cells can play an important role both in increasing sta-
tionary fuel cell installations and in growing the fuel cell
manufacturing industry. While direct financial support
for fuel cell projects is an important element of these
policies, there are a myriad of other actions that states
can take to both raise awareness of and to remove bar-
riers to fuel cell installations. Policymakers should devel-
op comprehensive legislation that addresses all of the
factors that can encourage or hinder fuel cell markets
in their states.
 Fuel Cells: Briefing Papers for State Policymakers • Hydrogen Production and Storage 11
Hydrogen Production
and Storage
Charles Kubert and Warren Leon • May 2011
Introduction
W
hen policymakers consider the ex-
panded use of hydrogen in either vehi-
cles or stationary applications using
fuel cells, they sometimes express con-
cern about how the hydrogen will be
produced, transported, and stored. This briefing paper
provides background information on hydrogen production
and storage, and shows that there is already considerable
experience with hydrogen. It also looks at ways to produce
hydrogen from renewable resources both in the near-
term and long-term. The paper’s focus is on the produc-
tion and storage methods needed for stationary fuel cell
deployment rather than on the larger infrastructure re-
quired to support using hydrogen extensively in vehicles.
As an introduction, although hydrogen is the most
common element in the universe, it cannot be mined or
extracted in its elemental form. It instead needs to be sep-
arated from other compounds (such as water or hydrocarbon
fuels). This conversion process requires energy, but the
hydrogen produced can still be a cleaner and more reliable
source of stored energy than either fossil fuels or grid
electricity.
Currently, hydrogen is widely used as a commodity
chemical, with approximately 10–11 million metric tonnes
produced in the US each year. If it were used directly as
a fuel, that amount would be enough to power about
30 million cars or 5–8 million homes.
Hydrogen production falls into four general categories.
According to the US Energy Information Administration,
about 25% of the total is produced and used on-site at
oil refineries, generally for “hydro-treating” crude oil as
part of the oil refining process to improve the hydrogen-
to-carbon ratio of the fuel. Production for ammonia for
fertilizer accounts for 21%. Merchant production for sale
to diverse parties for such purposes as treating metals and
“hydrogenation” in food processing accounts for another
15%. Finally, about 36% of total US production is a by-product
of another process, most frequently catalytic reforming
at oil refineries or production of chlorine and caustic soda.
Hydrogen Production Methods
Hydrogen is produced today primarily through steam
methane reformation (SMR), in which natural gas or another
methane source is reacted with steam in the presence of
a catalyst to produce hydrogen and carbon dioxide. The
current cost of producing and transporting hydrogen
through SMR as a dedicated process (rather than as a
by-product) is $2–$5 per delivered kilogram.
Hydrogen can also be produced by electrolysis, in
which water is split into hydrogen and oxygen atoms in
an electrolyzer, using only electricity. This process currently
costs about twice as much as SMR, although it could be
more competitive in places where the cost of the elec-
tricity for electrolysis is particularly low. Electrolysis may
be used as a means of storing energy. For example, the
electricity produced by wind turbines during off-peak
periods could produce hydrogen, which could then be
stored and used to generate electricity at a later time
in an on-site fuel cell system or to provide hydrogen
for other applications.
Additional emerging hydrogen production methods
include gasification or pyrolysis (gasification in the absence
of oxygen) of coal, low-value oil refinery products or
biomass, and direct solar photochemical processes. The
US Department of Energy is placing particular research
emphasis on hydrogen production methods that have
low overall emissions of greenhouse gases per unit of
usable energy (i.e., those utilizing renewable non-carbon
resources).
Hydrogen Delivery and Storage
For some stationary fuel cell applications, transportation
of hydrogen is not an issue, because the hydrogen is pro-
duced on-site. That is the case with molten carbonate fuel
Hydrogen
Production
by Alkaline
Electrolysis
These electrolyzers
are manufactured by
Hydrogen Technolo-
Norsk Hydro
gies AS and each is
two megawatts.
 12 Clean E n e r g y stat e s a l l i a nce
cells, some phosphoric acid fuel cells, and solid oxide fuel
cell technologies. They all directly convert natural gas or
biogas into hydrogen internally within the fuel cell itself.
However, smaller stationary fuel cells, such as those
using proton-exchange-membrane (PEM) technology
(e.g., those used in forklifts and telecommunications
towers) and some phosphoric acid fuel cells, often rely
on hydrogen produced off-site and delivered in tanks
to be stored on-site.
Some code officials and policymakers, as well as the
general public, remain concerned about the flammable
nature of hydrogen. In reality, through 40 years of indus-
trial use, well-developed codes and standards governing
hydrogen’s transport, storage, and use have evolved to
ensure safety. Like gasoline and natural gas, hydrogen is
flammable. But also like gasoline and natural gas, it can
be managed safely when the codes are followed and its
properties are understood.
Hydrogen is often delivered in 22-foot or 44-foot
steel tube trailers and can be stored on-site in the trailer
vessels or transferred to code-certified pressure vessels.
When needed in larger quantities or when transporting
hydrogen over long distances and/or to multiple sites,
it is often delivered as a liquid in a cryogenic tanker. After
transport, the liquid can be transferred directly to an in-
sulated storage vessel where it is later vaporized for use
as a gas, or it can be vaporized from the tanker and used
to fill on-site gaseous storage vessels. Hydrogen is also
transported by pipeline, typically as a low-pressure gas.
Several small hydrogen pipeline networks exist in the
United States, usually near petrochemical production
facilities, such as those along the Texas Gulf Coast and
in Louisiana and California.
The applicable codes that states should follow are
the ASME Boiler and Pressure Vessel Code, Section VIII
(http://campaign.asme.org/bpvc10/Pressure_Vessels.cfm)
for stationary uses and 49 Code of Federal Regulations
(www.access.gpo.gov/nara/cfr/waisidx_99/49cfr172_99.
html), which covers the transport of hazardous materials.
Compressed
Hydrogen Gas
Tube Trailer
This hydrogen
FIBA Technologies
tube trailer with
10 tubes carries
140,000 cubic feet
of hydrogen at
2,800 pounds per
square inch. It is
made by FIBA Technologies, a manufacturer of high-pressure
vessels for storing and transporting gases.
These codes specify that hydrogen cylinders and stor-
age tanks should be stored outside at a safe distance from
structures, ventilation intakes, and vehicle routes. When
it is necessary to locate storage inside, the provisions
in National Fire Prevention Association (NFPA) Com-
pressed Gases and Cryogenic Fluids Code (www.nfpa.
org/aboutthecodes/AboutTheCodes.asp?DocNum=55)
should be followed. Although codes and standards
provide valuable guidelines, local officials have the final
authority for permitting hydrogen storage and power
generation facilities in a given jurisdiction.
Production of Renewable Hydrogen
Although stationary fuel cells can be highly efficient
(with a combined efficiency of up to 80% when waste
heat is utilized), they presently still rely primarily on non-
renewable fuels such as natural gas. In the longer term, it
is envisioned that cleaner and more sustainable sources
of hydrogen will be employed. In fact, a number of states
are facilitating this goal by offering financial incentives
for fuel cell installations that employ hydrogen derived
from renewable resources.
There are four key technology platforms for the
production of hydrogen from renewable resources:
1. On-site Use of Biogas: Methane biogas is produced
as a by-product of wastewater treatment, the decom-
position of landfills, and anaerobic digestion of manure
or food processing waste. This biogas is often used to
fuel conventional reciprocating engines, but can also
be used to generate power and process heat directly
in an on-site fuel cell. Several wastewater treatment
plants, wineries, breweries, and a food processing facility
in California have installed fuel cells to utilize their
on-site biogas, and California’s Self-Generation Incen-
tive Program provides enhanced incentives for fuel
cells using on-site biogas. For an example, see the
sidebar on Sierra Nevada Brewery.
2. On-site Solar or Wind: Solar panels or wind turbines
installed at commercial/industrial sites to produce
electricity can be used to produce hydrogen through
electrolysis. AC Transit (a San Francisco Bay Area
transit agency that operates a fleet of fuel cell buses)
and Honda (see sidebar) are implementing demon-
stration projects for this.
3. Industrial-scale Solar, Wind, Geothermal, or
Hydropower: Electrolysis-based hydrogen production
facilities can also be co-located with large-scale re-
newable energy sites and the hydrogen then shipped
to various markets. This could be a more cost-effective
means of storing energy than batteries or other options.
For an example, see sidebar on Hawaii.
 Fuel Cells: Briefing Papers for State Policymakers • Hydrogen Production and Storage 13
4. Grid Power: Twenty-nine states currently have
renewable energy portfolio standards that require
utilities in the states to generate or procure an increas-
ing share of their electricity from renewable sources.
As these portfolio requirements are tightened, renew-
able energy will occupy an ever larger share of the
country’s overall energy mix. As a result, hydrogen
produced from a national grid that is increasingly
enriched with renewable sources, will itself become
increasingly renewable-based.
It is expected that the costs of renewable energy and
the processes used to convert these sources to hydrogen
will decline over time. However given the current high
costs for these technologies and the low cost of natural
gas, steam reformation of natural gas will continue to
be the low-cost source for hydrogen for the foreseeable
future, whether produced on-site or off-site.
Conclusions
Although large-scale commercialization of hydrogen
vehicles will require a significant ramp-up in hydrogen
production and development of an extensive delivery
infrastructure, the technologies and safety standards are
already in place to handle hydrogen production, distribu-
tion, and storage for stationary fuel cells and early-market
material handling applications, such as forklift trucks. Most
larger-scale stationary fuel cell installations produce hydro-
gen directly from natural gas within the fuel cell stack,
eliminating the need to transport and store hydrogen.
Those fuel cell applications that require on-site storage
of hydrogen need relatively small amounts, which can
be safely stored in approved containers.
State policymakers can confidently move forward
in supporting stationary fuel cell technologies without
fear of jeopardizing public safety. Even though hydrogen
produced from natural gas is a relatively low-carbon carrier
of energy, in the long-term, hydrogen production for
both transportation and stationary power uses should
move towards renewable sources of energy such as wind,
solar, and biomass to produce the hydrogen. Renewable
sources are already used at some production sites, for
example producing hydrogen from biogas obtained from
wastewater treatment. However various cost and technical
challenges remain in producing larger quantities of hydro-
gen at central locations from renewable sources such as
solar, wind, and hydropower. State policymakers should
encourage research and demonstration projects that
address those challenges.
Honda’s Solar Photovoltaic
Hydrogen Electrolysis Station
I
n 2010, Honda Motor Company in Torrance, California opened
a new, more compact and efficient solar-hydrogen refueling
station. Solar PV panels produce electricity for hydrogen pro-
duction through electrolysis. The system uses a 48-panel, 6-kilowatt
solar PV system. It is designed to demonstrate what could ultimately
be appropriate at the household level.
The most noteworthy feature of the prototype is the use of a new
type of electrolyzer that eliminates the need for a compressor. This
is expected to improve system efficiency by about 25% compared
to a previous Honda prototype, while also reducing the size and
cost of other key components.
The station has a modest capacity and flow rate, producing about
0.5 kg of hydrogen over 8-hours. The company projects this would
be sufficient for an individual with a consistent commute to drive
10,000 miles per year. An interesting feature of the station is that it
is designed to take advantage of net metering and potential future
smart-grid developments by exporting electrical power to the grid
during the day and then using a similar amount of energy at night
during off-peak times when the cost of electricity is typically lower.
Electrolysis Using
Solar Electricity
Source: Honda Motor Company
This solar-powered
hydrogen refueling
station was devel-
oped by Honda to
demonstrate what
might ultimately
be used at the
household level.
Using Hydrogen for Grid
Management in Hawaii
T
he Hawaii Natural Energy Institute of the University of Hawaii
is implementing a project to demonstrate how electrolyzers
can be used to take the surplus production from renewable
energy facilities and convert it to hydrogen. This approach is espe-
cially appropriate to Hawaii, which has excellent renewable resources,
variability in generation from those resources, and a significant
difference between base load and peak load. The electricity for the
demonstration will be supplied by Puna Geothermal Venture and
the hydrogen will be used by the County of Hawaii Mass Transit
Agency for two shuttle buses. US DOE is Project Sponsor and the
Naval Research Laboratory is Federal Technical Program Manager.
 14 Clean E n e r g y stat e s a l l i a nce
Fuel Cells for Supermarkets
Warren Leon and Alexei Ponomarov • July 2011
Introduction
S
upermarkets are turning out to be an important
early market for stationary fuel cells. State clean
energy agencies that are interested in helping
to bring fuel cell technology into widespread use
would be well-served by explicitly supporting
fuel cells for supermarkets as a key market niche.
The Appeal of Fuel Cells for Supermarkets
In recent decades, supermarkets have grown larger and
some have moved to 24-hour operation, 7 days a week.
Stores have added large banks of freezers and refrigerated
cases, as well as sections where prepared foods are cooked
and kept warm. These changes have not only significantly
increased the electrical, heating, and cooling loads of
supermarkets, but have made them well-suited to take
advantage of the electricity and heat provided by fuel cells.
Fuel cells provide a constant supply of electricity, which
is just what these new supermarkets need. The heat pro-
duced by the fuel cells can be used for a variety of purposes,
from heating water to running absorption chillers for cool-
ing the stores. Using both outputs is key to the economics
of a supermarket strategy for fuel cells, and also yields
significant greenhouse gas emission reductions and other
environmental benefits. The total efficiency of supermarkets’
fuel cell systems can be quite high—often twice or more
efficient as getting power from a central utility.
Because supermarket owners need to worry about
the risk to the large inventory of cooled and frozen food
during an interruption of power from the electric grid, they
appreciate a fuel cell’s ability to keep operating during a
blackout. With a fuel cell, a supermarket can remain open
at a time when the surrounding community is vulnerable
and in need of supplies.
Recent trends in fuel cell financing have made them
more business friendly. Manufacturers and system inte-
grators increasingly offer lease arrangements that reduce
the up-front cost of an installation. Longer initial warranties
and the option of purchasing an extended warranty
reduce the risk to the supermarket company.
Reasons for State Agencies to Target
Supermarkets
Fuel cells clearly have appeal for supermarkets, but
why might state agencies want to give special attention
to supermarkets? Most importantly, to commercialize a
new technology, it makes sense to concentrate on a few
niche markets where it can gain traction and become self-
sustaining, rather than trying to spread the technology
thinly over a small number of random installations in
diverse settings.
The early installations among supermarket chains have
created growing visibility for fuel cell technology within the
industry. This is starting to stimulate other supermarket
companies to want to learn about fuel cells and consider
emulating the early adopters.
Beyond the essential starting point that fuel cells are
a good match for the energy needs of supermarkets,
there are other reasons why this is a promising niche:
• Supermarket chains own multiple stories. As in the cases
of Price Chopper and Whole Foods Market described
below, a company that climbs the steep learning curve
for the first installation can then take what it has learned
and apply it to additional installations in other stores.
Each new installation becomes easier and better
adapted to the specific needs of the company.
• Because of their many customers, supermarkets can
educate large numbers of people about fuel cells
through information panels and educational materials
in those stores that have fuel cells.
• Supermarket chains can use fuel-cell-powered fork-
lifts and other materials handling equipment at their
distribution centers, as well as stationary fuel cells
at their stores.
Grants and other incentives from state agencies have
been essential to make the initial fuel cell installations
possible. Such support will continue to be important in
the coming years. Through it, states can help to advance
a promising clean energy technology, while helping
important local businesses.
The rest of this briefing paper describes a few of
the early uses of fuel cells at supermarkets. In addition
to these examples, other supermarket companies have
used fuel cells, including Central Grocers, H.E. Butt
Grocery Com-pany, Safeway, Star Market, Stop & Shop,
and Wal-Mart.
Albertsons Implements a Model Installation
A 50,000 square-foot Albertsons supermarket that opened
in San Diego, California in 2010 is being powered by a
PureCell 400-kilowatt fuel cell system from UTC Power. The
 Fuel Cells: Briefing Papers for State Policymakers • Fuel Cells for Supermarkets 15
system was leased from UTC, reducing Albertsons’ up-front
costs and risks.
The fuel cell provides about 90% of the electricity
that the store needs. Albertsons is also using almost all of
the heat produced by the system for heating and cooling.
In the case of a power outage, the fuel cell can generate
enough energy on-site to power the building. Because
of the use of the heat, the total efficiency of the system is
about 60% (nearly twice as high as relying on the electric
grid) and the store’s annual carbon footprint is reduced
by 478 metric tons of CO2. In addition, the PureCell system
is designed to operate in water-balance, saving millions
of gallons of water annually when compared to traditional
power generation.
Pete Pearson, Director of Sustainability and National
Accounts for SuperValu, Albertsons’ parent company,
explains that the company weighed its energy options as
part of the planning process for the new store. “At the very
beginning of the project, we thought of implementing a
system that would provide clean energy for our facility.
We considered solar installations but a fuel cell seemed to
be the perfect solution. We wanted to help the environ-
ment, reduce our carbon footprint, and gain operational
efficiency. We performed a thorough engineering and
financial analysis before proceeding with implementation.
And now the system is in place and is working just fine
and as expected.”
Federal and state financial incentives were necessary
to make the project financially feasible. Especially impor-
tant was a grant from California’s Self-Generation Incentive
Program through San Diego Gas & Electric.
Albertsons also needed to learn about and give special
attention to the interconnection process, especially because
of the company’s desire for the fuel cell to be available as
The fuel cell at an Albertsons supermarket in San Diego.
independent power during a electric grid power outage.
“Particularities of the interconnection with the grid in San
Diego area were unknown to us,” comments Pearson. “But
we communicated with San Diego Gas & Electric; they
provided us with the requirements to safely disconnect
from the grid.”
As advice for other companies that may want to con-
sider installing a fuel cell, Pearson points out that “you
have to have adequate gas and electrical connections
that could run in parallel with the fuel cell. Furthermore,
fuel cells are not ‘one size fits all’. You have to work closely
with the vendor and the utility company and, of course,
get the financial piece settled first.” Because a fuel cell is
still a relatively new technology, the company “has to make
sure there is proper service and support provided from
the vendor’s side. We negotiated a clause with UTC to
assure that we have availability of parts and service con-
tractors in case of malfunction of the fuel cell. UTC Power
has a remote control system which can track the operation
of the fuel cell and dispatch service technicians within
24 hours to repair it.”
It has been important to Albertsons to let shoppers
know that the store is powered by the fuel cell. The store
therefore features abundant signage about it and the com-
pany will highlight the fuel cell in the store’s upcoming
one-year anniversary celebration.
Price Chopper: One Fuel Cell Leads to Another
Price Chopper’s experience shows how an initial successful
fuel cell installation can lead to additional installations.
The supermarket chain, which is based in Schenectedy, New
York and has 128 stores in six Northeast states, started by
installing a fuel cell in its Colonie, New York store. It then
moved on to install a fuel cell in its Glenville, New York
location, and more recently installed a third system in
Middletown, Connecticut.
Price Chopper started to investigate fuel cell projects
because of concerns about the instability in electricity
prices and the price spikes of 2007. Grants from the state
of New York through the New York State Energy Research
and Development Authority (NYSERDA) were essential to
achieving an appropriate return on investment for the
Colonie and Glenville projects. With grants of roughly
$800,000 for each project, the price of each fuel cell went
down to between $1 million and $1.5 million. Significantly,
Price Chopper’s management projects a five-year payback
period. “Without the grants, the projects would not have
been approved,” notes Benny Smith, Vice President of
Facilities at Price Chopper.
The Colonie project was the first field-connected
installation of UTC Power’s new 400-kilowatt PureCell
system. Price Chopper is leasing the fuel cell, which was
installed in June 2009. It generates up to 70% of the store’s
 16 Clean E n e r g y stat e s a l l i a nce
Price Chopper’s first fuel cell installation in Colonie, New York.
required energy during the summer and the entire amount
of electricity needed during the winter. The system also
captures the heat produced by the fuel cell, which is used
for hot water, refrigeration, air conditioning, snow melting,
and floor heating.
A key benefit of the fuel cell is that it provides the
store with an uninterrupted power supply. In case of a
grid failure, the supermarket will continue to operate
at full capacity independently of the electric grid.
Price Chopper is convinced that fuel cells are a perfect
match for supermarkets. As Smith points out, “Supermar-
kets are a great facility to apply fuel cell technology because
we are operating 24-7 year-round. It’s not like an office
building where you go home at five o’clock and the
lights go off.”
Wegmans Switches Forklifts
Supermarket chains’ distribution centers run 24 hours a
day, 7 days a week. In these large indoor spaces, battery-
powered forklifts are usually used for materials handling,
because they do not produce any emissions. But battery-
powered systems also have disadvantages and fuel cell
technology has recently been proving itself to be a
sound, practical alternative.
For one thing, battery charging, with up to three
battery changes a day, can disrupt work flow, whereas
fuel cell refueling proceeds quickly. In addition, fuel cells
1 Jennifer Gangi, “Fuel Cell-Powered Forklifts: Raising the Bar,” Industrial Utility Vehicle & Mobile Equipment Magazine (May–June 2008).
Available at http://www.iuvmag.com/articles/2008_05-05.html
ensure constant power delivery and performance. As
Jennifer Gangi of Fuel Cells 2000 notes, they avoid “the
reduction in voltage output that occurs as batteries dis-
charge and the numerous interruptions in current input
and output electric forklifts experience due to the frequent
starting and stopping during use.”1
In March 2010, Wegmans, a supermarket company
with stores in six eastern states, purchased nine hydrogen-
powered forklifts for its Retail Service Center at Highridge
Business Park in Pottsville, Pennsylvania. The forklifts were
manufactured by Plug Power, one of several suppliers of
fuel-cell materials-handling equipment. A $1 million grant
from the Pennsylvania Energy Development Authority
helped make the project possible.
The employees at Wegmans were not only trained on
how to operate the new forklifts, but were also educated
about hydrogen and fuel cells, as well as the financial and
environmental reasons for adopting the new technology.
“The new equipment with the fuel cells was a huge
hit”, said David J. Allar, the Maintenance Manager at the
Wegmans Center. “Employees are highly satisfied with
the new forklifts. They don’t need to wait for the battery
to be charged or changed any more. Operators can refill
the fuel cells with hydrogen at their convenience. Refuel-
ing takes several minutes and lasts for about two shifts.”
With the use of the fuel cells, Wegmans was able to
avoid the addition of 60 lead-acid batteries, changing
equipment, and more staff to maintain and change the
batteries. Moreover, Wegmans determined that imple-
menting forklifts with fuel cells in just the produce area
of the Retail Service Center reduced the company’s carbon
emissions by an amount equivalent to removing 134 cars
from the road.
One of the fuel-
cell-powered
forklifts being
used at the
Wegmans Retail
Service Center.
 Fuel Cells: Briefing Papers for State Policymakers • Fuel Cells for Supermarkets 17
Another important benefit of the hydrogen-powered
forklifts is that, once installed, they do not require any
special charging space. Rooms that were previously used
to recharge the lead-acid batteries can now be used as
additional space for product storage. According to Allar,
just gaining this extra space was a large enough financial
advantage to the company to almost pay for the fuel cells.
“The fuel cells have performed far beyond our ex-
pectations,” concludes Allar. “There was nothing that in-
terrupted our operations in the least and the employees’
reception of the new technology was incredible.”
It is unsurprising that Wegmans has added to its fuel
cell fleet and currently has 37 forklifts in operation. The
company is now looking to expand its use of fuel cells
to yard tractors and refrigerated trailers at the Retail
Service Center.
Whole Foods Thinks Holistically
Whole Foods is serious about “whole energy” as well.
The company takes a systematic, holistic approach that
seeks to reduce energy use at all stages in a store’s life-
cycle, from store design and construction through engi-
neering, procurement, relationships with suppliers, and
maintenance. As part of the search for the best energy
solutions, the company has experimented with fuel cells
and installed them in four stores in California, Connecticut,
and Massachusetts.
In San Jose, California, a UTC 400-kilowatt PureCell
system installed in 2010 is generating more than 90%
of the store’s needs. The heat produced by the fuel cell
is being used for heating and cooling, as well as for
refrigeration of the produce in the store. Because the
system takes advantage of both the electricity and heat
generated by the fuel cell, it is approximately 60 percent
efficient. Whole Foods Market estimates that the installa-
tion reduces its carbon footprint by 370 metric tons of
carbon dioxide each year. The California Energy Commis-
sion provided valuable support to make the installation
possible.
Two stores in Connecticut have been equipped with
UTC Power fuel cells. In Fairfield, another 400 kilowatt
UTC Power fuel cell has been installed. The project received
a grant of $731,291 from the Connecticut Clean Energy
Fund as part of that agency’s On-Site Renewable
Distributed Generation Program.
A 46,000-sq-foot-store in Glastonbury, Connecticut
was Whole Foods Market’s first fuel cell installation in
2008 and the first supermarket in the world to get most
of its energy from a fuel cell. Like the other three installa-
tions, this one is configured to operate independently of
the electric grid if necessary. A 200-kilowatt UTC Power
fuel cell is able to provide enough energy for the store
to operate without interruption in case of a grid failure.
The system provides half of the store’s electricity needs
and all of the required hot water.
A fuel cell has also been put in place in Dedham,
Massachusetts with help from a grant from the Massa-
chusetts Renewable Energy Trust. The 400-kilowatt fuel
cell generates most of the electricity for the store. “With
the combined power generated from our fuel cell and solar
panels, the Dedham store is essentially able to generate
almost 100 percent of its power needs onsite with clean
energy resources,” observes Kathy Loftus, Global Leader
of Sustainable Engineering, Maintenance and Energy for
Whole Foods Market. The clean energy systems help the
company reduce its carbon footprint by 764 metric tons
of CO2 per year.
Whole Foods Market has also started to use fuel-cell-
powered forklifts. Sixty-one forklifts are in operation at
a distribution center in Landover, Maryland. Although
the company had been aware of the labor-saving virtues
of fuel-cell-powered forklifts, the equipment was not
affordable until Genco Supply Chain Solutions received
a $6.1 million award from the US Department of Energy
through the American Recovery and Reinvestment Act.
Now, by introducing the new forklifts, Whole Foods has
reduced the 4,000 hours in labor time that it took annually
to recharge the batteries of the previous folklifts to only
250 hours.
But the company is not stopping there. As Loftus
notes, “Whole Foods also hopes to retrofit one or two
sites with 100-kilowatt, solid-oxide fuel cells from Bloom
Energy of Sunnyvale, California, in the near future.”
UTC Power
A fuel cell being delivered and installed at the Whole Foods
Market in Dedham, Massachusetts.
 18 Clean E n e r g y stat e s a l l i a nce
Stationary Fuel Cells and
Critical Power Applications
Charles Kubert • May 2010
Introduction
I
n recent years, events ranging from weather to
natural disasters to human error have exposed the
vulnerability of our electric grid. For many individu-
als and businesses, these power outages are often
no more than a temporary inconvenience. But for
critical facilities in both the public and private sector—
telecommunications towers, hospitals, airports, emer-
gency dispatch, banks and data centers, and even basic
infrastructure such as water and sewage pumps, traffic
signals, and refrigeration—even brief outages represent
a risk to public safety and potentially significant societal
and economic costs.
For decades, these types of critical facilities have relied
on two types of back-up power: banks of valve-regulated
lead-acid (VRLA) batteries and diesel generators. While both
of these technologies are relatively low cost, each has short-
comings, particularly for facilities that need to plan for
power outages measured in hours and days, not minutes.
VRLA battery systems are typically designed to only
provide power for approximately 15 minutes at full power,
enough time to complete an orderly shutdown of equip-
ment. They can also assure a constant supply of power
so that even temporary (under 1 minute) power outages
or surges do not disrupt computer equipment. However,
batteries are sensitive to extreme heat and cold, making
them imperfect for outdoor applications in many locations,
and they need to be replaced every few years due to
declining performance.
Diesel generators (gensets) are today’s primary source
of backup power. However, they are inefficient, produce
emissions from fuel combustion, and require periodic main-
tenance. Often, they are not suitable for urban locations,
where the associated noise, fuel storage, and pollution are
unwelcome. In some jurisdictions, such as the state of
California, the use of diesel generators for back-up power
purposes is subject to strict air quality regulations. In addi-
tion, in extreme disasters and prolonged power outages,
diesel generators are reliant upon the delivery of fuel.
Hurricane Katrina and the earthquake in Haiti are both
reminders of that risk.
Fuel cells are a technology that both the public and
private sectors are increasingly turning to for both primary
and back-up power needs. Although the understanding
of the chemistry of fuel cells goes back more than a
century, they are very much a 21st century technology.
The basic design and electrochemical principle behind
fuel cells is straightforward. A fuel cell stack requires only
hydrogen (or a similar energy carrier), oxygen, and an
electrolytic solution. Hydrogen and ambient air flow into
the fuel cell, which contains an anode and a cathode. At
the anode, the hydrogen separates into a proton and an
electron. The proton migrates to the cathode, where it reacts
with the oxygen to form water. The electrons, which can-
not pass through the membrane, flow from the cell to
provide useful electrical power.
Fuel cells are quiet, have no moving parts, and produce
no particulate emissions. They are virtually maintenance-
free and can be both tested and operated remotely. Because
they are modular, they can be configured for any size
power needs, from a few kilowatts for a remote telecom-
munications tower to megawatt-scale for hospitals and
airports. Hydrogen is safely stored on-site or produced
within the fuel cell itself. (For more on fuel cell technolo-
gies, please see accompanying CESA briefing papers at
www.cleanenergystates.org/JointProjects/hydrogen.html.)
Fuel Cell Application Platforms
There are two primary application platforms in the use
of fuel cells for critical facilities. The first application uses
fuel cells strictly as standby power in the event of grid
failure. The second application utilizes fuel cells as a high-
quality source of primary power for the facility that will
also continue to provide uninterrupted power during
an electrical outage.
Standby Power
In a standby power application, the fuel cells, or a combi-
nation of fuel cells and batteries, provide direct current
(DC) power to run the equipment or facility. The fuel cells
have internal batteries that provide temporary “bridge”
power until the fuel cell reaches peak power production
and takes over the load. When grid power is restored, the
fuel cells shut down. Fuel cells can be ramped up quickly
and can operate indefinitely as long as there is a continu-
ing source of hydrogen or other fuel. Proton Exchange
Membrane (PEM) fuel cells are used for this application.
 Fuel Cells: Briefing Papers for State Policymakers • Critical Power Applications 19

Primary Power electrical power supply. Currently, the primary source of

As a source of primary power, fuel cells can provide con- backup power for communications towers is lead-acid
sistent, distributed, high-quality power generation to a batteries. However, batteries can provide power for only
facility, regardless of disruptions to the electric grid. This a limited duration. In addition, since many telecommunica-
model is a significant paradigm shift in thinking about tions towers are located in remote areas, maintaining these
critical power because the fuel cell provides reliable, base- battery banks can be challenging. These towers are, there-
load power generation and continues to operate even fore, an ideal application for fuel cells. The fuel cell and
when the electric grid goes down. Because they are used hydrogen tank can be securely stored behind a fence at the
continuously and systems can be configured to use by- tower and can be operated automatically and remotely.
product heat from the fuel cells, the capital costs of the The State of Pennsylvania has installed a hybrid power
fuel cells can be spread out over all facility operating hours. solution microcell communications
Fuel cells can also displace purchases of both electricity and site in Clinton County. The site uses
natural gas. solar photovoltaics and a small
wind turbine, with a PEM fuel cell
Cost/Benefit manufactured by ReliOn providing
Fuel cells do have higher up-front costs when compared backup power when the solar and
to other forms of both standby and distributed genera- wind generation are insufficient.
tion. But these costs can be lower on a life-cycle basis The site supports first responder
because of the reduced replacement and maintenance communications activities, making
needs. Further, the higher reliability of fuel cells means it critical that it be operational at
that the potential human, social, and economic costs all times. ReliOn

of prolonged power outages can be greatly reduced.

Finally, fuel cells owned by private companies are eligible
for a 30% federal investment tax credit further lowering
the cost differential with other forms of backup power.
Applications of Fuel Cells
in Critical Facilities
Telecommunications
The telecommunications industry relies on a network
of cell phone towers and field facilities to transmit phone
calls and data. To operate effectively, each of these towers
and field facilities requires a constant and highly reliable
First Responder Stations & Call Centers
During the massive blackout in New York City in August
2003, the New York Central Park Police Station remained
in operation because it is powered by an on-site fuel cell
that is grid-independent. Other first-responder stations
across the country are beginning to adopt this model—
by using clean, distributed generation to power and heat
their facilities. For example, New York just completed the
largest fuel cell project in the nation at the Verizon 911
call center in Long Island, and the East Anaheim Police
Department and Community Center in California has in-
stalled a fuel cell system to provide power for its operations.

Table 1: Relative Comparison of Characteristics of Backup and Distributed Power Systems

Initial Capital Variable O&M Maintenance Fuel
Technology Cost ($/kW) ($/kWh) Requirements RunTime Emissions Lifespan
Battery 400–900 Depends on local No direct
Low Short Short
(Lead-Acid) electric rates emissions
Diesel Genset Long (if fuel
350–800 0.025 Medium Significant Long
available)
Natural Gas Engine 450–1100 0.025 Medium Long Low Long
Microturbine 950–1,700 0.014 Medium Long Low Long
PEM Fuel Cell 7,000 0.01–0.05 Low Long Very low Long
Molten Carbonate
5,000 0.01–0.05 Low Long Very low Long
Fuel Cell
Note: Fuel cell costs exclude batteries required for startup and/or backup.
Source: “New Performance Based Standards for Standby Power,” Clean Energy Group, 2007; “Economic Analysis of PEM Fuel Cell Systems,” Battelle
Memorial Institute, 2005.
 20 Clean E n e r g y stat e s a l l i a nce
This 200 kW fuel cell installation
is located at the East Anaheim
Police Department and Commu-
nity Center. The fuel cells pro-
UTC Power
duce enough energy to power
250 typical homes in Anaheim
and any excess power is then
fed back into the electric grid. It can also provide backup power
to its dedicated loads in the event of a power outage.
Air to Ground Communications
T
he Federal Aviation Administration (FAA)
launched a program in September 2009 to
deploy fuel cell backup power units ranging in
size between 1 kW and 4 kW (51 kW total) at 26 sites across
the FAA’s three service centers: east, central, and west.
The FAA has been using fuel cells at its sites since 2003
to provide backup power to air-to-ground communi-
cation and repeater equipment. This new project will
provide fuel cell backup power to radio transmit receive
(RTR) and air traffic control sites that are not currently
using traditional backup power systems. At these sites,
if grid power goes out, the site goes down, causing a
disruption in communication between pilots and ground
control. The high reliability of fuel cells is expected
to improve communications at these locations in an
environmentally responsible manner.
Hospitals
Hospitals are required by law to have a secure, resilient
power supply to continue to operate critical equipment
during power outages. For most hospitals, this has meant
diesel generators. The Connecticut Clean Energy Fund
sponsored a fuel cell installation at the Saint Francis Hos-
pital in Hartford, CT. The St. Francis fuel cell operates in
a combined heat and power application that produces
up to 200 kW of baseload electricity and preheats boiler
feed water with the heat recovered from the fuel cell.
The fuel cell system also provides secure power in case
of grid failure.
Airports
Power blackouts at airports are infrequent but extremely
disruptive and costly for air traffic control, airlines, airport
security, and passengers. The power outage at Reagan
National Airport on January 4, 2010 was not just a local
problem; it represents a national energy reliability and
security problem. And it happens all too often at airports
around the country, unnecessarily disrupting passen-
gers, threatening airport security, and wasting money.
Although airports have redundant power supplies
including back-up generators, these can and do fail. Sev-
eral airports are testing fuel-cell operated ground handling
equipment. Airports should also consider the replacement
of diesel generators with fuel cells for back-up power. To
amortize the costs of these systems, airports should con-
sider the installation of fuel cells large enough to provide
a source of primary power for the entire facility.
Emergency Centers
According to the Department of Energy, under an ex-
treme national disaster scenario, schools could provide
a safe haven for 25 to 50 million citizens. Several state
clean energy funds support on-site clean energy projects
at schools that can serve as emergency shelters. If grid
power is down, many of these facilities will have at least
partial power to conduct emergency management oper-
ations and meet community needs. For example, South
Windsor High School and Middleton High School in Con-
necticut are home to fuel cell systems that provide a por-
tion of the schools’ primary power under normal opera-
tions and provide grid-independent power which enable
the schools to be used as emergency shelters.
Wastewater Treatment
Wastewater treatment is critical public infrastructure
that needs to keep operating in the event of power loss.
In addition, the biogas produced in the treatment pro-
cess provides a readily available renewable fuel to power
a fuel cell system, while avoiding the flaring or release of
methane. To reduce air pollution and reliance on the local
power grid, the Regional Wastewater Treatment Facility
in Tulare, California, decided to implement a reliable and
clean, onsite, distributed power resource. Tulare is home
to more than 50,000 residents and the wastewater facility
treats nearly 9 million gallons of water per day. The facil-
ity installed an anaerobic digester to capture methane
from the wastewater treatment process, which then is
used by three stationary fuel cells to provide high-quality,
clean baseload power, resulting in substantial cost savings
to the facility. The fuel cells have successfully addressed
emissions non-attainment restrictions in place through-
out California’s San Joaquin Valley. The fuel cells have
successfully reduced the facility’s emissions as well as
its reliance on the local power grid.
Policy Support for Fuel Cells
in Critical Facilities
State and local governments can promote the use of
fuel cells in critical facilities through a number of policies.
 Fuel Cells: Briefing Papers for State Policymakers • Critical Power Applications 21

St. Francis Hospital Backup Power Requirements

St. Francis Hospital is the first hospital
in Connecticut powered, in part, by a
fuel cell. The PC25 cell, manufactured
and installed by Connecticut-based UTC
Power, generates 200 kW of electricity. It
eliminates part of the hospital’s depen-
UTC Power
S
tate and local codes for emergency and back-up power
requirements generally follow the National Fire Protec-
tion Association’s (NFPA) National Electrical Code (NEC).
NEC Article 708, first included in 2008, covers Critical Opera-
tions Power Systems (“COPS”) and is the most comprehensive
and stringent set of standards for back-up power established

dence on the power grid and will provide

supplemental power in the event of a
power disruption.
• Require that fuel cells be installed as primary or back-
up power systems in all new public buildings and all
critical use facilities (e.g., emergency dispatch centers,
hospitals, water pumping, wastewater treatment).
Leading by example, states and municipalities can
jump-start fuel cell demand and provide visible
demonstration projects. In addition, the long invest-
ment horizon for public entities allows them to finance
and amortize system costs over decades, lowering
the up-front financial hurdles.
• Specify performance requirements for back-up power
(for example, emissions, reliability, operating time)
that are more rigorous than those that lead to the
selection of diesel generators as the default technol-
ogy and that are best met by fuel cells.
• Provide state incentives and/or financing to support
the installation of fuel cells for these critical facilities.
• Develop federal-state partnerships to fund installa-
tions and facilitate joint procurement.
to date. NEC Article 708, developed in response to the 2003
power blackout in the Northeast and Hurricanes Katrina and
Rita, covers any facility that, if incapacitated, would disrupt
national security, the economy, public health and/or safety.
Local jurisdictions have the authority to designate a facility
as a COPS. Potential facilities include air traffic control centers;
fire and security system monitoring; hazardous material han-
dling facilities; communication centers and telephone exchanges;
emergency evacuation centers; financial, banking, business
data processing facilities; fuel supply pumping stations; hospi-
tals; water and sewage treatment facilities; 911 centers; critical
government facilities; police, fire and civil defense facilities
including power for radio repeater operations; radio and TV
stations; and transportation infrastructure.
NEC 708 specifies that these facilities or critical components
of these facilities must be capable of restoring power within
ten seconds and running for up to 72 hours (3 days) on back-up
power. NEC 708 specifically designates generators, uninter-
ruptable power supply or fuel cell systems with adequate fuel
supply as meeting these requirements. For more information,
refer to page 70-609 of the NEC 2008 Edition (available at
www.nfpa.org) or for an overview of Article 708, see
http://www.geindustrial.com/Newsletter/cops.pdf.

Conclusions
Reliable sources of standby and primary power are
essential for the tens of thousands of facilities—from
telecommunications towers to hospitals and data centers
—for which even brief interruptions of power can have
significant impact. Fuel cells are an ideal source of both
FuelCell Energy

primary and standby power for these applications. They

are clean, quiet, reliable, and produce consistent, high-
quality power. They are also cost-effective relative to
other technologies on a life-cycle basis.
State policies should recognize the advantages of fuel
cells for these critical facilities and encourage or require
their installation as new facilities are built or renovated.
This is not part of “worst case” disaster planning. Rather,
snow and ice storms, transformer damage and human
error can all result in power outages lasting from a few
minutes to many days. Regardless of the cause, fuel cells
should be part of the solution in protecting our commu-
nities’ critical infrastructure when the power goes out.
Tulare Regional Wastewater Treatment Plant
By utilizing digester gas as an onsite renewable energy source,
Tulare received $4 million in financial incentives from California’s
Self-Generation Incentive Program (SGIP) and avoided paying
$600,000 in state Emission Reduction Credits that would have
been required if it had used combustion equipment. This com-
bined heat and power configuration uses three FuelCell Energy
DFC 300™ Fuel Cells.
 Clean Energy States Alliance (CESA) is a national nonprofit coalition of state clean energy
funds and programs working together to develop and promote clean energy technologies and markets.
CESA provides information sharing,technical assistance services and a collaborative network for
its members by coordinating multi-state efforts, leveraging funding for projects and research,
and assisting members with program development and evaluation.

Many states across the U.S. have established public benefit funds to support the deployment
and commercialization of clean energy technologies. More than twenty states are actively participating in
CESA membership activites. Though these clean energy funds, states are investing hundreds of millions of
public dollars each year to stimulate the technology innovation process, moving wind, solar, biomass, and
hydrogen technologies out of the laboratory and toward wider use and application in business, residential,
agricultural, community and industrial settings. State clean energy funds are pioneering new investment
models and demonstrating leadership to create practical clean energy solutions for the 21st century.

www.cleanenergystates.org

Clean Energy States Alliance

50 State Street, Suite 1
Montpelier, VT 05602
Phone 802.223.2554
Fax 802.223.4967
Email cesa@cleanegroup.org
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